Technologies are disrupting markets all over the world. The way people use transportation, leisure and entertainment have changed with Uber, Airbnb and Netflix, and more is to come with the wider adoption of autonomous vehicles, the internet of things, artificial intelligence and biotechnology. The question is how governments can respond to protect the public interest while stimulating innovation to drive economic prosperity.

The answer will be key for citizen trust in the ability of governments to preserve principles as technologies evolve. On the one hand, many governments struggle to keep the pace of law-making in sync with each new innovation that surfaces. On the other hand, they would benefit from a healthy dose of disruption and innovation themselves, by embracing new ways of decision-making, gathering input or offering better services and transparency.

The software industry, which embraced “agile” working methods to tap into the knowledge of people spread across networks to continuously improve product versions, has valuable experience in this regard. The agile manifesto, from 2001, looked at adaptive development with feedback loops of experiences in the use of software versions, ensuring continuous learning and improving. Almost 20 years later, various models of agile methods have been developed for companies and organizations, and now agile governance is beginning to show promising results.

There are more than 100 placesaround the world where governments are using technology to crowdsource policy. For example, in Iceland and South Africa, the constitutions were crowdsourced by citizens. Taiwan even has a Participation Officers Network that meets monthly to hash out service design improvements and hold policy design workshops with citizens. In Europe, open data and open budgets give citizens access to information and empower them to decide on the spending of public resources.

UNICEF and the Bank of England have opted for incubators to facilitate start-ups, and Belgium, the UK and Canada have worked with government policy labs to innovate governance. Hackathons invite disruptors to help governments crack challenges that require deep technological expertise and coding of quicker solutions to problems. One-stop shops, including one in Brazil, begin to simplify the use of sprawling webpages citizens need to navigate in order to register a birth or to find out where recycling bins are located.

Bringing governments closer to the people they serve has great potential to build trust in public institutions at a moment in which this can’t be taken for granted. Fifty-six per cent of respondents of Edelman’s Annual Trust Barometer say they do not know a politician they can trust, and 43% of the general public overall say they trust government.

Despite the many exciting examples, it's counter-intuitive for governments to embrace innovation. After all, bureaucracies tend to be hierarchical and cautious by design instead of networked organizations, while we live in a time where speed in responding to rapidly changing business models matters more than ever. Additionally, governments are accountable to society at large, while other stakeholders are merely accountable to a subset of society.

Moreover, regulatory sandboxes, developed first for fintech applications in UK, Singapore and Taiwan, allowing startups and other innovators to conduct live experiments in a controlled environment under a regulator's supervision, and other light-touch regulatory spaces that are intended for genuine testing and experimenting, have been mis-used as marketing tools by the companies operating in them.

Yet as long as the role of government is respected, parameters are clear and applied for the right policy challenges, agile governance can be a valuable complement to the more traditional sort, to ensure more policy flexibility and responsiveness in a world that rapidly changes.

A few guiding principles define an agile approach. A clear goal or set of principles is the point on the horizon towards which to work: “preventing traffic deaths and injuries” or “human rights must be respected by artificial intelligence decisions”. Agile should be both outcome-driven and evidence-based. Collaboration between different stakeholders or departments within organizations should generate inclusive knowledge-feeding into policies, which then enjoy greater legitimacy.

Through various iterations, lessons learned feed back into the process of tweaking either regulatory steps or how they are implemented. A variety of regulatory arrangements can then mark the space within which experimenting and learning can take place. From policy incubators to prototyping or policy labs, different challenges require different approaches. Some of these testing spaces may be created temporarily, with the choice of self-regulation or regulation, public-private partnerships or a super-regular decided based on the lessons learned.

To help zoom in on what challenge can benefit from which approach, a set of diagnostic questions can help guide government officials and policymakers. When a new technology emerges, is it covered by existing laws, or is legislation needed? If laws apply, is the reach of regulators adequate, or are changes needed? Which stakeholders are impacted by the changes of the new technology, and how can they be brought around a (virtual) decision-making table? Can a new service be tested without breaking laws?

Even though agile governance is in its infancy, a lot can be learned from practices as they are explored all over the world. One thing is certain: if governments are to preserve legitimacy with citizens, keep pace with technological change, commit to better service delivery and balance the needs for economic prosperity, agile is not a luxury but a necessity. More than a set of guiding diagnostic questions and tools to use, like a software update, agile requires a systems change.

The authors are the co-chairs of the Global Future for Agile Governance, working in developing, prototyping and testing an Agile Governance Tool Kit’ that will guide policymakers. For more information contact agile@weforum.org.